Public distribution scheme preferring cooperative societies upheld as a rational policy choice, with no violation of equality or trade rights.

A State public distribution scheme that preferred consumers' cooperative societies for allotment and running of fair price shops was upheld as a valid exercise of executive power. The preference was treated as a rational classification linked to the objective of equitable distribution of foodstuffs at fair prices, and not as an arbitrary or uncanalised delegation of power, so it did not offend Article 14. The scheme also did not infringe Article 19(1)(g), because the petitioners had no fundamental right to be appointed as agents under the scheme and remained free to carry on trade in foodgrains under the licensing regime. The constitutional challenge therefore failed.

---

---

Issues: (i) Whether the Madhya Pradesh (Foodstuffs) Civil Supplies Public Distribution Scheme, 1981, giving preference to cooperative societies in allotment and running of fair price shops, violated Article 14 of the Constitution of India. (ii) Whether the scheme infringed Article 19(1)(g) of the Constitution of India.

Issue (i): Whether the Madhya Pradesh (Foodstuffs) Civil Supplies Public Distribution Scheme, 1981, giving preference to cooperative societies in allotment and running of fair price shops, violated Article 14 of the Constitution of India.

Analysis: The scheme was framed under executive power with the object of securing equitable distribution of foodstuffs at fair prices after the earlier system had failed. It laid down detailed guidelines for establishment, allotment, and supervision of fair price shops, and the preference for consumers' cooperative societies was treated as a rule of preference, not a monopoly. Consumers' cooperative societies were held to constitute a distinct class with an intelligible differentia and a rational relation to the object sought to be achieved. The scheme was not found to confer arbitrary or uncanalised power on the Collector.

Conclusion: The scheme did not violate Article 14 and was upheld.

Issue (ii): Whether the scheme infringed Article 19(1)(g) of the Constitution of India.

Analysis: The Court held that the petitioners had no fundamental right to be appointed as agents of fair price shops under a Government scheme. The scheme did not prevent them from carrying on trade in foodgrains as wholesale or retail dealers under the relevant licensing order. Preference to cooperative societies in the distribution mechanism was held to be a policy choice in public interest and not an unreasonable restriction on trade.

Conclusion: The scheme did not infringe Article 19(1)(g) and was upheld.

Final Conclusion: The challenge to the public distribution scheme failed, and the impugned scheme was sustained as a valid exercise of State policy and executive power.

Ratio Decidendi: A State scheme for public distribution that gives a reasoned preference to cooperative societies, applies objective guidelines, and does not create a monopoly or deny the right to carry on trade, is not invalid under Articles 14 or 19(1)(g) of the Constitution of India.

---